Updated graph


We're well beyond the critical point in the graph now, which means that the correlation with this historical data can be declared dead.
On that note, here is some comical relief:
https://www.youtube.com/watch?v=v5xS3WoG76w

The problem with words is that half the time they get misinterpreted. Just because a company stays in business, doesn't mean that they execute certain projects. Did google fail because they didn't bring google glasses to the mass market?

Right now there seems to be some money stuck in accounts, only FC has access to.

You said it yourself. The name of the game is to get a net return on every BTC invested. That's what investors ultimately look for. FC was extremely aware of that point. BTC prices where still in the 370 USD range when sample chips got received. That's when the financing should have been secured (by funding the accounts). It didn't happen.

Do you want to buyout the company? Be my guest. Current management would love the idea. This is no joke.

I don't know how to respond to that. FC is an adult and he was repeatedly asked to delegate and improve certain conditions. He didn't comply with the requests. The desolate state surrounding providing information to shareholders was no secret. What is more surprising in hindsight is that key people who worked with FC on a daily basis failed to see the signs, and if they were they failed in the same way. The Rockminer story is testament to that.

Based on AM management, about 1000-2000 devices worth. The exact number depends on some quality factors.

$2M for fixed costs. The rest is the initial order + potential profit. You can target a lower amount, which either precludes any profit for AM or makes the fixed costs a significant amount. FC mentioned that the minimum order should be around $6M for it to make economical sense, but he said that doesn't include any profit margin.

2-3 months.

FC was continuously reminded to publish financial statements since they were due in Q4 2014. He also was reminded to secure financing for the tape out. It was considered a discretionary decision of the CEO to bring this either to public attention or not.

Sample chips for BE300 rolled out in December. At the quality of communication FC engaged in, some board members assumed this to be the actual tape out. In January at the board meeting FC communicated that there was no financing for the BE300 TO - that some investors were discouraged by the falling BTC price. I can only assume that this means he had someone making assurances and that someone didn't follow through.

In principal I agree with you and looking at it from a hindsight perspective, informing all shareholders may have encouraged some assistance. But this thing was going fast from 100 to 0 in 1-3 weeks.

For your clarification, FC stated that there is enough funding to keep people employed and working on design for a considerable amount of time. That didn't include major expense items like tape out costs, which he considered timing and market dependent. Obviously it doesn't make sense to spend $10 million on a tape out for a new chip if BTC sells at 1 USD (Reductio ad absurdum).

You are correct. Funding should have been secured in November/December the latest. Failure of creating a financial roadmap seems to be a prevalent theme with AM. Unfortunately roadmaps is something which small companies hardly do in their attempt to optimize business agility.

If you're frustrated how management carried out their decisions you're in good company. Unfortunately it's too late to change anything about it now.

The only person who could make a clear statement on that would be FC who conveniently vanished into thin air. On that note I will disclose that there has been a board meeting on the 17-JAN-2015 and 25-JAN-2015 and on neither dates FC mentioned that there may be a problem with the mining farm running AMHash. He was even discussing the strategic consideration surrounding a TO of the BE300, for which he failed to find financing. He was asked to compile a joint venture proposal to move the project further. That never happened.

It's very frustrating to see how the people who worked closest with FC seemingly have the least amount of information on his whereabouts. That alone reminds me of the dog who didn't bark.

I know how you feel. Been there.

A quick update re:AMHash

There is a good chance that contract holders will get a significant portion of their principal back. The details are currently being worked out. Please understand that there is currently a lot of blame shifting going on, but AM management shows an active interest in breaking the gridlock in order to be able to concentrate on getting the business back on track.

Right now I'd like to provide the following clues
a) You will not get 100% on the principal amount. While this may hurt AMHash buyers, please note that AM is certainly not making a profit from this failed product in any way.
b) If you consider litigation or are in talks with a lawyer, you may want to wait this one out. Chances are that after taking into account the cost of litigation or lawyer fees you end up with less %. Also the contractual situation is very complex - you may end up suing the wrong company.
c) You may have to prove your contract. Please make sure that you got proper documentation ready. However, if you hold a contract through one of the platforms, there may be a consolidated method which doesn't require proof.
d) If AM recovers from this crisis, there may be more coming down the pipeline for affected people in form of discounts.

I'd like to remind everyone that I am not a company representative, which means I cannot warrant for the correctness of the information provided. Unfortunately the company cannot announce anything until the details have been worked out. Act accordingly.

Also, if you'd be so nice and cross post this to inform AMHash holders - I don't have a map for where AMHash was marketed.

Q) I think a price "explosion" is imminent,  not to ATH territory,  but $400 or so is definitely in the cards.
A) 400 will likely not be enough. A reasonable risk/reward ratio starts at > 1000 USD.

Q) What kind of dollars are we talking would be required from such an investor? 
A) > $10M for a packaged deal to make sense.

Q) Does AM have possession of the IP related to BE300?
A) Yes. AM management also has a direct account with TSMC.

Q) You say the funding situation is Dire,  is this due to FC being in sole possession of the keys?
A) The funding situation is very opaque. David Fan cannot provide information on current accounting. He is currently paying bills from some of the remaining company funds, surplus cash flow and personal funds. The accounting was managed by friedcat, and the last financial statement was delivered 4 months late and incomplete. He was asked to make it complete, clean it up and publish it - which never happened. Given the current circumstance I may as well show the incomplete statement, which covers the time May/2014-Oct/2014:
https://mega.co.nz/#!YUtUwa4K!o9VTJYkv0-eO0V6UU3vPwXZshItuBwq-z146p0pBH6E

Q) Do you think FC is safe?
A) I have insufficient information for such a conjecture. I certainly hope he is safe.

Q) Is there a plan yet to compensate shareholders for Amhash1 shares held on Havelock?
A) On the side of AM any compensation would likely have to be financed either through operating revenue (which currently is going to 0 due to bitcoin price staying low and required funding to restock chip inventory) or the personal funds of volunteering shareholders. Unfortunately the morale among shareholders is rock bottom so everyone is looking at David Fan, especially since he also has an official company function. The question which is not so easy to answer is whether there would be a moral or legal obligation for such "volunteering". That said, he expressed his desire to develop a compensation plan for contract holders, conditional on the premise that everybody in the delivery chain carries a fair share.

Q) Hi, I don't get it, David should be as rich as FC! Why doesn't he invest into his company? Or rent coins to AM?
A) Why invest in a company which is loaded with liability when you don't feel responsible for the current situation? Also, wouldn't it be smarter to use the funds to restock the company with the latest chips in order to generate a profit from which these liabilities can be served? At the end this is a structural problem, that's why a reorganization of the company may be unavoidable.

Q) In the situation where the BTC price rises and free's up additional capital or VC money comes in to support the production of BE300, could shareholders reasonably expect to see some type of return later this year?
A) I cannot give investment advise. There are two types of returns. Revenue through increased market price and dividends. It would be very unlikely to see a company in the current state paying any dividends in the immediate future. Funds are better used to solve structural problems. The only exception to this would be a liquidation event of an unknown amount.

Q) Is the only other option the company goes under due to lack of funds and the legal process begins for those who wish to pursue it?
A) Provided that the core team stays intact and true to the mission the company would likely co-exist with bigger corps in the market place. How that would be structured is unknown. Any legal proceedings would of course hamper the ability of the company to operate, unless the situation is very asymmetric (i.e. legal defense costs are dramatically lower than legal offense costs).

Q) Anything else you can share with me would be appreciated. I would like your candid thoughts on the likelihood of VC coming in to play the role of white knight in the next 30-60 days window BE300 competitively has to get out to market. The other scenario is bound to happen, however we do not know if the price rise will take place in time for the chip to be profitable to product en masse.
A) The only way to make this work with an outside investor within 30-60 days is to do a clear cut reorg with a new Manager who has some experience in the industry.

Q) Why did ASICMiner wait weeks to provide concrete answers on the situation?
A) The board was officially fully informed of the "FC missing" problem at the end of February. Since then there has been a struggle for information, especially since FC apparently made himself a single point of failure on all kind of things. It was always assumed that David Fan was fully briefed on all aspects of the business - however that seems to be not the case.

Q) Are customers/investors threatening legal action at this time?
A) Yes.

Q) Is there a dispute between ROCKMINER and ASICMINER, and if so, can you share what is happening?
A) There is a dispute. The problem is that the underlying agreement is cluttered throughout write-ups, emails and verbal hearsay. And now FC is missing and cannot make a statement.

Q) Is ASICMiner solvent? Has ASICMiner taken steps to secure additional funding for core projects, chip development, etc.?
A) AM management seems to have failed to secure funding for core activities and the funding situation seems to have degenerated dramatically since Nov/2014. The problem is that there are no proper records to validate those claims quickly. An accountant would have to do a complete transactional rerun, using one of the valid financial statements as a checkpoint. According to David Fan the company bank accounts are low on funds and any remaining company funds may reside in accounts only FC has access to.

Q) What's next for ASICMiner?
A) There is increasing evidence that AM seems to be a one trick pony. I have no other way of putting it. As such, provided the bitcoin price rises, you can expect bitcoin mining devices to be produced which - should the profit margin be sustainable - should create shareholders value.

Q) With regards to the AM situation, could you elaborate on the what HashLord is and the role it played in AMHash?
A) I am sorry for the potential confusion. Hashlord was coined in reference to Landlord as the entity who is in control of the hashing power. At the current time it is not clear WHO that entity really was (Operator/AM/RM/FC/Third party). Obviously the operator can alway become the Hashlord by replugging the mining devices. That may have been the case - but there is no data to confirm that.

I hope I covered all the questions. If I missed one please state it again.

Regards

Let me break the silence, since many have wondered about the events on the board and among major shareholders. I apologize to all who sent me messages and didn't get a reply. But the situation at ASICMINER is simply hard to diagnose without first hand information. I guess I speak for every major shareholder when I say that no one saw the current situation coming. Sure - the company has been struggling lately, in part because the window of opportunity closed quickly and ASICMINER didn't move as fast as some of the competition. However, seeing how ASICMINER got hit by a double whammy of first loosing its farm and then its CEO is quite disturbing, to say the least.

The situation surrounding Rockminer is complex. I am saddened to see such an aggressive stand of Rockminer towards ASICMINER. I can only suspect that they are getting a lot of pressure themselves. However, there are more professional ways to deal with the issue than to clutter the internet with confidential material - that alone speaks volumes. The only excuse I can see for this is that ASICMINER so far has dealt with the situation poorly - and this is inexcusable.

The contractual obligations are currently being analyzed. So far it is clear that there seems to be no real clause which defines who is liable for events like theft or fire. Obviously, there has been no insurance plan either. The general rule for situations like these is that any clear liability assignment is commercially not viable and the affected parties have to sort it out somehow. The problem is that the product AMHash theoretically involves 5 Parties (Operator, Manufacturer, HashLord, Contract Platform, Contract Holder), of which neither has the ability to absorb the damage alone.  So far the overall understanding is that ASICMINER should carry some responsibility - however, the ability of the company to deal with the current fallout is hampered. Pressuring the company to do anything which it can't deliver is not productive.

I hear that some parties are considering legal steps. Let me tell you that from experience this won't end well for anybody and only results in wasting money on the parasitic elements of our economy. What we need in the current situation is a leadership figure who seeks compromise. This crisis won't be solved overnight. If a solution is reached it's likely gonna be a 2 year plan or some form of agreeable settlement. I hope I didn't shock anybody with this assessment.

Regarding the shareholding. It has been of a lower priority. For everyone who is holding shares and has traded recently, please preserve the full trail up to the last checkpoint, which means the cryptographic signatures which are used to authorize reassignment of shares. If traded unsafely, there is no guarantee that the ownership can be confirmed. Beware of double spending vectors in OTC transactions and use escrow if possible.

I saw some claim for the board not doing its work. Unfortunately there is no job description for board members, nor do they have an official duty with the company (unless a board member decides to get actively involved with the business). The conclusion which was already drawn a long time ago is that proper assessment requires boots on the ground. But those who actually were, never developed the habit of fiduciary reporting. AM Management always enjoyed a lax handling. I am not certain whether a stronger hand would have helped though. The business is tough. One little detail though - FC was always conflicted which information to release to the board and which not - especially since some of the board members have a conflict of interest because they are working for the competition. As such we covered mostly the baseline of sticking to financial statements as required by law.

According to the latest status the BE300 is confirmed and working. However, to bring the chip to market requires FIXED COST + COST PER CHIP + BUILD OUT COST. The funding situation for this is dire and it would require a new investor or a big buyer who has to be certain that he gets what he is promised. There are two scenarios where this could be quickly achieved:
a) A bitcoin price explosion would release dormant capital instantly shifting the reward/risk ratio.
b) A new type of investor who enjoys preferred treatment over AM Shareholders for the financing of the BE300 tech. Likely implemented as a joint venture.

I will collect further questions via PM and answer them publicly. I am certain I missed a few important points in this post.

Regards

Updated graph. Critical point approaching fast. ETA March/April 2015.

In a nutshell, the explanation for communication issues is that no clear guideline exists on which information should be released at which time and in which format. So the topic has been dealt with half-assed and procrastinated ad infinitum, and frankly FC had bigger issues to deal with than inform everybody how many problems pop up on a daily basis. That said, AM may still be the most transparent mining device supplier on the market, simply due to the need to disclose financial statements.

Yes - a person has been selected to implement a technical solution. But unless a clear information policy and schedule has been worked out it's exchanging apples for apples. I'll do my best to keep the issue alive and hopefully we can agree on something like a transparent policy guideline which doesn't preclude surprise vectors.

You may want to check the definition of a shill. My policy has always been to reflect the current state of affairs based on my perspective. Note that I was as much exposed to AM's lost opportunity than everybody else here.

I am going to make a pre-announcement to serve some open questions.
a) financials statements are currently in preparation and start getting processed next week. Dependent on how long the accountant needs, the financial statements should be accessible shortly after
b) FC has committed to making a dividend payment soon to clear OTC and provide a new public checkpoint for shareholder balances.
c) The need for a better information handling with shareholders is being recognized and it's been suggested to prepare a dedicated website to handle company matters. It's part of an internal restructuring effort. I'll let the responsible person provide more details, but I assume that suggestions from shareholders on the best way to implement it (e.g. forum, realtime chat room, ticket systems) are welcome.
d) the good news is that the company is alive and kicking. Based on my assessment they have a solid product and new stuff in the pipeline, which should allow the company to generate revenues to sustain growth. The biggest advantage of AM is its focus on cost competitiveness and solid relationships with suppliers, which allows them to grow the company organically. The bad news is that a lot of opportunity got lost in FY14 and supply chain and product problems prevented AM from generating the expected profit margins. That said FY14 has been a bad year for most companies in the mining space, and thus AM is not a particular exception.
e) AM has enough funding to stay in business independent of BTC valuation for a considerable amount of time.
f) The low valuation of AM has not gone unnoticed. While valuation is currently not an impediment to AM's business, it is recognized as a weakness and may have to be dealt with appropriately at a future point in time.

There is no victory in this. The bankruptcy action was the outcome of a deteriorating situation and irresponsible company behavior. Why do you think the action was approved so quickly? Because the company was being responsible?

Taking peoples assets and not delivering as agreed upon or represented by at the time is bad acting. The reason why the company started playing around with cash flow of their orders is massive undercapitalization. Simply put they bit off more than they could chew for the amount of risk capital which went into the company formation. Customers didn't sign up to become equity holders - they ordered a product.

By that logic the absence of a trial or a judgement means there was no crime. The only part I agree with is that the HashFast story has somewhat become the new normal: Reward owners and shareholders for failing businesses and perform a bail-in on customers and business partners when things become sour.

How big does a carrot have to be to keep you going in the face of failure? Apart from the missing indicators for the "shitton of money", what was the guarantee that this money would have been used to make good by the customers?

Ok. Let's hail the HF chip to maximize return on the upcoming auction. But let's just for a moment entertain the notion that the HF chip requires close to the most expensive board design in the industry to keep it operating. If you don't have break-through technology to build a cost-competitive board for the chip, you're toast.

The only thing I don't understand is your role in all of this. The only rational conclusion which lends itself to making sense is that you were "in on the scheme" and the disruption by the bankruptcy deprived you of a source of income. Anything else would suggest that you're suffering from the Stockholm syndrome.

Try to put a price tag on removing a bad actor from the mining industry and discouraging other players to follow step. There was never an indication that HashFast would turn around and stop abusing the market. In fact the opposite is true. Old HF customers may get less or close to nothing for their contracts and orders, but overall this should be considered a healthy outcome because it prevents the company from destroying wealth of future miners.

You can start a poll and ask people if they'd rather get 5 cents on a dollar or see their abuser brought to justice.

What lawyers, especially those on contingency, seem to not understand is that legal action is not a business tool. It is a vehicle for stopping abuse. However, in an environment in which the rule of law is increasingly abandoned this confusion is understandable.

Scorpions - Still Loving You

https://www.youtube.com/watch?v=II_fmdIhrc4

I am going to revive this topic. Find below an updated trend comparison.


The irony of the matter is that the resemblance significantly broke when this pattern was posted. Note that if the endgame prediction still stands there won't be much time left (~ 5 months) before the market cap of BTC will see a massive revaluation.

Note the location of the summer 2014 mini rally. It pretty much is aligned with the rally in the german mark gold price from >1000 to <10000. Albeit there is a massive deviation from the pattern since Dec 2013, there exists a subtle timing in the market which suggests that a monetary death event goes through similar timing.

We're now also at a time when the german mark hit the 10,000 barrier after which all hell broke loose and the exponential curve added additional growth factors. This timing suggests that we're now entering monetary exodus.

I am aware that this analysis almost looks ridiculous given the recent decline in BTC price. However, I do not need to remind you that the BTC market is tiny and that the price can be whatever the central players dictate. The only reason for BTC to break out of the containment is for it to become the battle field of the central players.

Gentlemen, be careful with spending your BTC. You may not get them back.

Another truth which needs highlighting. I'd add a few items though:
a) specialize on a particular game/industry. Learn it inside out - increase or odds by making educated predictions.
b) hope for the best, plan for the worst. That is assume you will be hurt in ways you don't know yet.
c) know your league. You cannot play the billion dollar game with a 10k portfolio.

Bitcoin is an interesting phenomenon. It seems to negate point c), since the access to bitcoins is leveled. Unfortunately it also enhances point b), b/c the irreversibility of the payment makes it hard to contain fraud.

As long as there is no clear guidance on information policy, I have to defer to FC in answering those questions. That said - I don't have the data you're asking for (other than the tape out date).

Ok. I'll bite. Where is the windfall in not spending your BTC with HashFast? Where is the windfall in getting your equipment on time and yielding the same amount of bitcoins back which were used to purchase the equipment in the first place?

I don't know which agenda you serve or which playbook you're drawing from. But logic certainly is not your friend. You come here and keep insulting the intelligence of HashFast victims and blame them for lending trust to people who nefariously abused it, instead of pointing the finger at those who acted in bad faith.

If you would have the least amount of decency you would just shut up and let the legal system deal with the fallout of this mess.

Based on the information provided the gen4 is coming along according to schedule. There will be some time span in which it will be evaluated. However, to put things in perspective any new chips will not move the profit margins too much. Profit margins are mainly a function of BTC price, network power and average upkeep costs. The tech has moved quickly in the last 2 years and is hitting Moore's barrier pretty hard. Main profits will likely come from innovative ways to reduce capex and opex, which not necessarily requires the latest chips.

I took a break from disseminating information because FC started missing his own deadlines. I can provide information on what's being said, but I cannot create explanations for what's happening and why. That has to come straight from the man - it's his company and his stakeholders after all.

On that front I can say that board members are as much interested in knowing some details about the operation and future projections as anyone else here. However, FC keeps the details of the operation close to his chest. The board is trying to improve the situation for shareholders, but it's a longer term process.